Ireland Tax DeductionsRelief is given mainly in the form of a credit on tax payable.
Some forms of relief are granted as a deduction, that is, a reduction in the taxable income.
- Most relief refers exclusively to Irish residents.
- The following amounts are subject to the definitions in law.
|Class of Relief||Amount - EUR|
|Exemption for a married couple||3,300|
|Exemption limits for a senior citizen||18,000|
|Rent on a residential apartment||Up to 2,400|
|Medical insurance||Up to 20%|
|Payment to an approved pension scheme||Subject to ceiling|
|Mortgage interest||20%-25% For first time buyers|
Ireland Business DeductionsIn addition to the deductions/credits listed above, deductions and business expenses may be claimed as detailed below:
- Offset of losses - A loss from one source of income may be offset against revenue from another source in the same tax year, including capital gains. A loss may be offset forward without any limit on the number of years.
- Transactions between affiliated parties - Transactions with affiliated companies with a material identity of ownership or control are carefully inspected by the tax authorities who compare the value of the transactions with accepted market prices.
- Financing costs -Business financing costs may generally be deducted. Financing costs for an affiliated company being held 75% or more by a non-treaty foreign owners is permitted only subject to the restrictions.
- Bad Debts - Provision for bad debts is allowable on certain conditions.
- Depreciation Expenses - The straight-line method is the usual method of depreciation ,defined as capital allowance, in Ireland.
A loss may be offset back for one year.
In a cluster of EU resident companies with controlling shareholders who have a 75% holding, a loss in one company may be offset against the profits in another company in the group.
In most cases the amount paid is not allowable as an expense.
A depreciation table is presented below:
|Asset||Annual Depreciation (%)|
|Building||2 - 4|
|Machinery and equipment||12.5|
|Buildings in Inner City Improvements Areas||50%|